Most of the cryptocurrency seized by the National Tax Agency was stolen; mnemonic code mistakenly included in press release

It has been discovered that the majority of the cryptocurrencies seized by the South Korean National Tax Service from habitual high-income tax delinquents have been stolen by someone. The reason for this is that a photo published in a press release showed a mnemonic code , which is the master key for the wallet.

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South Korea tax service reveals crypto wallet recovery phrase in press release, seized tokens moved in suspected breach: report | The Block
https://www.theblock.co/post/391578/south-korea-tax-service-reveals-crypto-wallet-recovery-phrase-report

On February 26, 2026, the National Tax Service of Korea announced that it had conducted searches of the homes of 124 individuals, including those with large amounts of delinquent tax debt and habitual delinquents, and carried out large-scale seizures.

The problem arose in the case of a delinquent taxpayer named Mr. C. The National Tax Agency (NTA) confiscated four USB flash drives from Mr. C's home, which were being used as hardware wallets to store virtual currency. However, when announcing the incident, the CEO posted a photo of a note containing a mnemonic code that had been stored with the USB flash drives, without any blurring, showing it lying next to the drive.

The mnemonic code is equivalent to a master key, and if you lose or damage your hardware wallet, you can restore it if you have the code.

In this case, someone spotted an opportunity shortly after the National Tax Service released its press release and first deposited a small amount of Ethereum into the wallet as a remittance fee. They then transferred 4 million PRTG (Pre-Retogeum) tokens stored in the wallet in three separate transactions to another wallet. The National Tax Service announced that it had seized 8.1 billion won (approximately 867 million yen), but 6.4 billion won (approximately 695 billion yen) of that amount was actually stolen.

Professor Cho Jae-woo of Hansung University and an expert in blockchain data analysis said, 'Publicating the mnemonic code in the press release is like advertising to open your wallet and bring money,' strongly criticizing the authorities, saying, 'The authorities' lack of basic understanding of virtual currencies has ruined the opportunity to return billions of won to the national treasury.'

Professor Hwang Seok-jin of Dongguk University also said the authorities' actions were 'essentially the same as saying, 'Take it all,' and leaving it alone,' and warned, 'People should never take photos of the mnemonic codes or store them on the cloud or anywhere else.'

In South Korea, in May 2022, 22 bitcoin and 2.1 billion won (approximately 226 million yen) in cash were lost at Gangnam Police Station in Seoul, which had been storing items believed to be related to a crime. The items had been voluntarily turned in, but the USB memory-type hardware wallet in which the bitcoin was stored was left behind. Police were unaware that the bitcoin had been stolen for four years. Two men in their 40s were arrested in connection with this incident on suspicion of violating the Information and Communications Network Act.

'21 비트코인 유출' 피의자 2명 체포...경찰 관리 허술 탓? / YTN 사이언스 - YouTube